Electoral competition, party system fragmentation, and air quality in Mexican municipalities

We study how electoral competition and party system fragmentation affect local environmental public goods provision. When the effective number of political parties is too low, there is not enough competition to incentivize service provision by the incumbent. Increasing the number of parties in this scenario strengthens electoral competition and the incentive for the incumbent to deliver public goods. However, when the number of political parties is too high, the system becomes too fragmented to produce beneficial outcomes in public goods provision. We therefore expect a U-shaped relationship between the effective number of parties and local air pollution. Based on a Mexican municipal panel data of 1999, 2004, 2009, and 2014, our empirical analysis confirms this theoretical expectation: PM2.5 pollution goes down with the effective number of parties before the latter reaches the value around three; after this point, air pollution goes up with the effective number of parties.